Johnson no more 💊
Apple's shady business, Ola's HR problems, and Info Edge's win.
Market summary: 📊
Soft kickoff to the week in India, but at least not landing in the red. US ended flat too — as investors grapple with the impact of inflation.
US:
S&P 500 - down 0.001%
Nasdaq - down 0.066%
India:
Nifty 50 - up 0.04%
Sensex - up 0.05%
What’s brewing hot? ☕
1️⃣ No man for Ola — everybody seems to be jumping ship at Ola. After a COO, CFO exit, now the company’s General Counsel is out too, barely 9 months on the job. Not unusual for startups to lose talent, especially in the current market where it's a fist-fight numbed with fat-checks and benefits, but… Ola’s HR is apparently troubled with significant attrition, with average tenure dropping to 1-1.5 years. We don’t care, but IPO investors will. 🖖
2️⃣ How them IPOs do boo — host of companies came gushing through the gates yesterday. Most notably, insurance marketplace Policybazaar... with stock ending up 17.3% by the end of the day. Not exactly a goldrush, but acceptable given the choppiness we’re seeing lately. SJS Enterprises, the auto-body parts seller, wasn’t so lucky, opening down 6.5%. Meanwhile pharma player Sigachi Industries, a microcrystalline cellulose maker (a product used to solidify tablets, vitamins etc.), couldn’t catch a breath, popping 270% at open.
Johnson & Johnson is breaking up too 🤏
Last week, we saw General Electric split into 3 companies. This week, we have the 135 year old Johnson & Johnson empire — splitting into 2 separate publicly-traded entities, a move meant to keep the business humming in a new post-pandemic world.
J&J is a household name, thanks to its extensive lineup of everyday products like the baby talcum powder, Tylenol, Band-Aid, and countless more. But… lately the business has suffered from poor growth, product duds, and countless lawsuits for bad R&D.
Their COVID-19 vaccine was a shit show, proven to cause blood-clots in certain group of patients
The baby-talc powder is proven to contain Asbestos and cause cancer in infants, resulting in billions of dollars of lawsuits — worse? J&J knew all along and did nothing about it
The image is just too toxic in the market.
So, what’s next — the core business will still be called J&J, and which will focus on research-led pharmaceuticals and medical devices generating about $75 billion in annual revenue.
The low-margin consumer-products business, generating ~$15 billion in revenue with a couple hundred independent brands in its kitty — will be spun out as a new entity in the next 24 months.
Big Picture — its becoming quite common for pharma companies to separate their consumer and drug verticals — Pfizer and GlaxoSmithKline had made similar moves recently, which makes J&J’s move a lil less surprising for the markets.
Quick look at a B2B acquisition 💰
Surprisingly no big raises for Monday, but… B2B commerce platform Moglix made a quick acquisition — buying out Singapore based fintech-player NuPhi.
NuPhi offers supply chain financing for SMEs engaged in cross border trade — coupled with a bunch of SaaS tools for payment automations and other associated tasks, which make it easy for the company to “gather” data and do better underwriting than the old uncle with a pencil at the neighborhood bank.
Anyway, the suite will now be integrated with Moglix’s own supply chain financing platform Credlix — which has already disbursed credit worth $100 million+ in loans.
Meanwhile, big raise in VC town, ☝️
3one4 Capital, which has backed startups from Koo, to Open Bank in fintech, to Pocket-Aces in Media, raised a fresh pot of ₹1,000 crores for its 3rd fund.
Indian ventures have raised nearly $27B so far this year, on their way to top $33 billion by the end of the year, leaving China in the dust. Especially with the IPO markets responding well, likely a lot more $$ coming down the pipes…
Apple getting shadier each day 🧐
What happened — independent developers are claiming Apple is running ads in their names to drive users to its App Store, so it can collect the 30% commissions on the payments users make.
To be more clear, App-developers typically discourage new users from signing up on mobile-apps (especially for paid products) because Apple takes a 30%-cut of everything they make. For example, giants like Spotify, Netflix, ask people to pay via browsers, then login and use the app on mobile.
Anyway, Apple clearly loses out on billions in revenue this way. Apps that the company is marketing include Masterclass, HBO, Babble, Tinder, and Bundle, and maybe even yours lol.
Bottomline — Apple’s services business is on its way to make $70 billion this year. Apple is already sitting on $200 billion in cold cash. Corporate-greed dictates you keep digging, but with rising developer resistance, the bad PR this gathers... how much is enough?
Closing Out — Info Edge reaps big on Zomato 🤙
The Nasdaq QQQ of India, Info Edge, the holding company that owns a host of digital properties like real-estate portal 99acres, Shiksha, reported a kick-ass quarter — growing revenues 37.3% YoY to ₹352 crores, with strong recovery across recruitment products, edtech, and real estate platforms.
Info Edge also made a killing on the Zomato IPO — pulling in ₹8,900 crores in profits from the listing.
Big picture — if you’re fishing for reasonably priced growth-tech names, no need to go sifting on the Nasdaq. Sanjeev gotchu!
What else are we Snackin’ 🍿
🛬Gates open - India will allow entry of fully vaccinated foreign travelers from 99 countries, ending 20 months of restriction. Long time since the death scares!
🚀 Some relief - India’s exports rose by 43% YoY to $35.65 billion in October, while imports soared 69% for the month.
😐 Screwed the cops - Hackers breached email servers of the FBI, and sent over 100,000 spam emails. Can’t make it up!
Hit that 💚 if you liked today’s issue.
You can forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀